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Gartner Announces Rankings of Its 2016 Healthcare Supply Chain Top 25
November 17, 2016 | Gartner, Inc.Estimated reading time: 3 minutes
Gartner, Inc. has released its eighth annual Healthcare Supply Chain Top 25 ranking. The ranking recognizes companies across the healthcare value chain that demonstrate leadership in improving human life at sustainable costs.
"Leaders in healthcare realize that the patient and demand-driven concept is the alignment of the supply chain to the customer need that it ultimately fulfills," said Stephen Meyer, research director at Gartner. "One aspect of being patient and demand driven is already universal in the industry — every player in the value chain is aware that there is a patient requiring care at the end. Leading organizations understand satisfying a customer is more than just treating a patient's disease or condition. Patient expectations of treatment cost, location and convenience are an opportunity that leaders from all industry segments are using to define their supply chains."
Intermountain Healthcare took the top spot in the Healthcare Supply Chain Top 25 for 2016 after two years at No. 3 (see Table 1). Intermountain Healthcare's journey to the top is the culmination of strategy, talent and capital coming together in a sustained effort to transform its supply chain. The provider delivered on an initiative to standardize across 62 clinical product categories with alignment and buy-in from the C-Suite. That effort generated $24 million in savings in clinical commodity products.
The company also strengthened its Intalere acquisition, building the Intermountain Committed Contracts Program that aims to leverage IM's strength in direct sourcing as a new offering. Service is also a priority as the company expanded its vision for its Supply Chain Operations Center to include medical devices and a rise in service levels to 99 percent on commodities.
Cardinal Health maintained the second spot in 2016 and is the highest ranking distributor on the list. However, Cardinal Health is more than a distributor. The company emphasizes technology to help develop and deliver tailored new products and services to patient groups. Recent announcements include a new distribution agreement with Biosensors International to extend its interventional vascular business for coronary stent portfolio. Additionally, Cardinal's FUSE innovation lab brings customers and healthcare stakeholders together to explore technology opportunities to help shape future products and services.
Although Mayo Clinic dropped to the No. 3 spot in this year's ranking, it has been one of the most consistent performers in the top 25. It ranked in the top five for the past six years and was No. 1 in 2015. In 2016, the company developed and launched Reveal, a program that provides real-time visibility and transparency for suppliers in measuring contract compliance across their facilities and affiliates. The company simultaneously delivers value for itself and its affiliates via organic growth and working with partners. Mayo Clinic is approaching 10 years of continued expansion of these commercialization efforts with consistent year-over-year revenue increases from those services.
"The supply chain capabilities being built today are the foundations that will enable effective and affordable healthcare in the future. However, that future will likely see significant challenges in terms of cost, patient outcomes, and how and where care is delivered," said Mr. Meyer. "It is unlikely that these challenges will be solved by small iterations of change to the current model. Instead, innovation will likely come in the form of new technologies and new competitors. Leading supply chains want to be a 'disrupter' and not a 'disruptee.' They are building incubators to pilot new technologies. They are collaborating with visionaries from other industries, such as Google, Amazon and Uber, and some are playing the 'long game' and investing in solutions that won't demonstrate their real value for years."
More detailed analysis is available in the report "The Healthcare Supply Chain Top 25 for 2016." Additional analysis on the Healthcare Supply Chain Top 25 is also available in the complimentary Gartner webinar "The Gartner Healthcare Supply Chain Top 25 for 2016."
About the Healthcare Supply Chain Top 25 Methodologies
Consistent with Gartner's Top 25 research methodologies, the Healthcare Supply Chain Top 25 ranking is derived from two main analyses: quantitative measures and opinion. Quantitative measures provide a view into how companies have performed in the past, and establish proxy connections between financial health, performance and supply chain excellence. The opinion component offers an eye to value chain leadership and demonstrated supply chain performance — crucial characteristics of Gartner's Top 25 ranking. These two components are combined into a total composite score.
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